How do you calculate the cost of downtime?

Multiply the lost quantity or hours by the rate per unit, scale by a capture factor, then add fixed costs. Here 100 × $45 × 80% + $250 = $3,850 total downtime cost.

What is the capture factor?

It is the share of the gross loss that is genuinely recoverable or real. At 80%, only 80% of the $4,500 variable loss counts, because some lost output may be recoverable later or wasn't sold-out demand, giving $3,600 in variable cost.

What should the rate or value per unit be?

Use the contribution margin per unit or the fully-loaded cost per lost hour, depending on whether you measure in units or hours. Here $45 per unit drives the $3,600 variable portion.

What goes in the fixed adjustment?

One-time costs tied to the event that don't scale with duration — restart scrap, a maintenance callout fee, or expedited freight. The $250 here adds directly on top of the variable cost.

What is downtime cost per unit?

It is total cost divided by the quantity of lost units or hours. Here $3,850 over 100 units is $38.50 per unit, useful for comparing the severity of different stoppages.

Why use a capture factor instead of full cost?

Not every lost unit is a lost sale. If you can make up output on overtime or weren't capacity-constrained, the true loss is less than gross — the capture factor keeps the estimate honest.

OEE & Factory Performance calculator

Downtime Cost Calculator

Downtime cost translates lost production into dollars so a stoppage stops being an abstract event and becomes a number leadership acts on. This calculator multiplies a quantity (lost hours or units) by a rate or value per unit, scales it by a capture factor that reflects how much of that loss is truly recoverable, then adds a fixed adjustment for one-off costs like restart material or callout fees. Maintenance managers, plant controllers, and reliability engineers use it to prioritize which failures to fix first and to build the business case for spare parts, redundancy, or preventive maintenance. Putting a credible dollar figure on downtime is what gets capital approved.

What this calculator does

Estimate downtime cost from lost hours, hourly margin, capture factor, and restart cost.
Use it when downtime cost in oee and factory performance is being put through a oee and factory performance weighted-cost review.
It computes total downtime cost as quantity times rate times a capture factor, plus a fixed dollar adjustment, and breaks out the per-unit and variable components.

Formula used

Weighted cost = quantity × rate × capture factor + fixed adjustment

Inputs explained

Downtime hours: Hours of unplanned downtime in the period.
Cost per downtime hour: Lost margin plus labor per hour stopped.
Capacity-recovery share: Portion of lost output that is truly unrecoverable.
Fixed response cost: Flat callout, expedite, or restart cost per event.

How to use the result

Use it to size the financial impact of a stoppage or recurring failure mode when justifying maintenance, spares, or reliability investment.
It is a weighted estimate, not full activity-based costing; the result is only as good as your rate and capture-factor assumptions, which can vary widely by whether the lost output was truly sold-out demand.

Current U.S. benchmarks

U.S. manufacturing runs at 75.6% of capacity (Federal Reserve, May 2026). New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate the cost of downtime? Multiply the lost quantity or hours by the rate per unit, scale by a capture factor, then add fixed costs. Here 100 × $45 × 80% + $250 = $3,850 total downtime cost.
What is the capture factor? It is the share of the gross loss that is genuinely recoverable or real. At 80%, only 80% of the $4,500 variable loss counts, because some lost output may be recoverable later or wasn't sold-out demand, giving $3,600 in variable cost.
What should the rate or value per unit be? Use the contribution margin per unit or the fully-loaded cost per lost hour, depending on whether you measure in units or hours. Here $45 per unit drives the $3,600 variable portion.
What goes in the fixed adjustment? One-time costs tied to the event that don't scale with duration — restart scrap, a maintenance callout fee, or expedited freight. The $250 here adds directly on top of the variable cost.
What is downtime cost per unit? It is total cost divided by the quantity of lost units or hours. Here $3,850 over 100 units is $38.50 per unit, useful for comparing the severity of different stoppages.

Last reviewed 2026-05-12.